Legislature(1993 - 1994)

04/06/1993 01:00 PM House CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              HOUSE COMMUNITY AND REGIONAL AFFAIRS                             
                       STANDING COMMITTEE                                      
                          April 6, 1993                                        
                            1:00 p.m.                                          
  MEMBERS PRESENT                                                              
  Representative Harley Olberg, Chairman                                       
  Representative Jerry Sanders, Vice-Chairman                                  
  Representative John Davies                                                   
  Representative Cynthia Toohey                                                
  Representative Ed Willis                                                     
  Representative Bill Williams                                                 
  MEMBERS ABSENT                                                               
  Representative Con Bunde                                                     
  OTHER HOUSE MEMBERS PRESENT                                                  
  Representative Ron Larson                                                    
  COMMITTEE CALENDAR                                                           
  *HJR 37   Urging Congress to enact H.R. 1033 or similar                      
            legislation authorizing construction grants for                    
            publicly-owned treatment works in economically                     
            distressed rural communities.                                      
            PASSED FROM COMMITTEE WITH A DO PASS                               
  *HB 173   "An Act exempting certain charitable gaming                        
            activity from municipal sales and use taxes."                      
  HB 70     "An Act relating to state impact aid for                           
            municipalities: and providing for an effective                     
            NOT HEARD                                                          
  Bills Held from Previous Calendars:                                          
  HB 209:   "An Act relating to community health aide grants."                 
            PASSED FROM COMMITTEE WITH A DO PASS                               
  (* first public hearing)                                                     
  WITNESS REGISTER                                                             
  Representative Ron Larson                                                    
  Capitol Building, Room 502                                                   
  Juneau, AK  99801-1182                                                       
  Phone: 465-3878                                                              
  POSITION STATEMENT: Prime Sponsor of HB 173                                  
  Rick Urion, Lobbyist                                                         
  City of Bethel                                                               
  321 Highland Drive                                                           
  Juneau, AK  99801                                                            
  Phone: 586-6366                                                              
  POSITION STATEMENT: Opposed HB 173                                           
  Ron Pagenkopf                                                                
  Juneau Youth Activities Co-op                                                
  P.O. Box 33206                                                               
  Juneau, AK  99803                                                            
  Phone: 586-2027                                                              
  POSITION STATEMENT: Supported HB 173                                         
  Myra Munson, Lobbyist                                                        
  Alaska Native Health Board                                                   
  229 4th Street                                                               
  Juneau, Alaska  99801                                                        
  POSITION STATEMENT: Supported HB 209                                         
  Deborah Erickson                                                             
  Health Program Specialist II                                                 
  Division of Public Health                                                    
  Department of Health and Social Services                                     
  P.O. Box 110610                                                              
  Juneau, AK  99801-0610                                                       
  Phone: 465-3090                                                              
  POSITION STATEMENT: Supported HB 209                                         
  Roger McKowan, Legislative Aide                                              
    to Representative Lyman Hoffman                                            
  Capitol Building, Room 503                                                   
  Juneau, AK  99801-1182                                                       
  Phone: 465-4453                                                              
  POSITION STATEMENT: Spoke on behalf of prime sponsor of HJR
  Keith Kelton, Director                                                       
  Division of Facility Construction and Operation                              
  Department of Environmental Conservation                                     
  410 Willoughby Ave., Suite 105                                               
  Juneau, AK  99801-1795                                                       
  Phone: 465-5180                                                              
  POSITION STATEMENT: Supported HJR 37                                         
  PREVIOUS ACTION                                                              
  BILL:  HJR 37                                                                
  BILL VERSION:                                                                
  SPONSOR(S):   REPRESENTATIVE(S) HOFFMAN,MacLean,Foster,                      
  Carney,Brice, Menard,Sanders,Willis,G.Davis,B.Davis,Davies                   
  TITLE: Urging the Congress to enact H.R. 1033 or similar                     
  legislation authorizing construction grants for publicly-                    
  owned treatment works in economically distressed rural                       
  JRN-DATE     JRN-PG               ACTION                                     
  03/30/93       853    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/30/93       853    (H)   CRA, HES                                         
  03/31/93       903    (H)   COSPONSOR(S): SANDERS, WILLIS,                   
  04/01/93       919    (H)   COSPONSOR(S): B.DAVIS                            
  04/05/93      1047    (H)   COSPONSOR(S): DAVIES                             
  04/06/93              (H)   CRA AT 01:00 PM CAPITOL 124                      
  BILL:  HB 173                                                                
  BILL VERSION:                                                                
  SPONSOR(S):   REPRESENTATIVE(S) LARSON                                       
  TITLE: "An Act exempting certain charitable gaming activity                  
  from municipal sales and use taxes."                                         
  JRN-DATE     JRN-PG               ACTION                                     
  02/24/93       433    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/24/93       433    (H)   CRA, JUDICIARY, FINANCE                          
  03/25/93              (H)   CRA AT 01:00 PM CAPITOL 124                      
  04/06/93              (H)   CRA AT 01:00 PM CAPITOL 124                      
  BILL:  HB 70                                                                 
  BILL VERSION:                                                                
  SPONSOR(S):   REPRESENTATIVE(S) MACLEAN                                      
  TITLE: "An Act relating to state impact aid for                              
  municipalities; and providing for an effective date."                        
  JRN-DATE     JRN-PG               ACTION                                     
  01/18/93       101    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/18/93       101    (H)   CRA, JUDICIARY, FINANCE                          
  03/25/93              (H)   CRA AT 01:00 PM CAPITOL 124                      
  04/01/93              (H)   CRA AT 01:00 PM CAPITOL 124                      
  04/06/93              (H)   CRA AT 01:00 PM CAPITOL 124                      
  BILL:  HB 209                                                                
  SHORT TITLE:  COMMUNITY HEALTH AIDE GRANTS                                   
  BILL VERSION:                                                                
  TITLE: "An Act relating to community health aide grants."                    
  JRN-DATE     JRN-PG               ACTION                                     
  03/10/93       590    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/10/93       590    (H)   CRA, STATE AFFAIRS, HES,                         
  04/01/93              (H)   CRA AT 01:00 PM CAPITOL 124                      
  ACTION NARRATIVE                                                             
  TAPE 93-21, SIDE A                                                           
  Number 000                                                                   
  CHAIRMAN HARLEY OLBERG called the meeting to order at 1:08                   
  p.m.  He noted Representatives Willis, Davies and Sanders                    
  were present.                                                                
  HB 173:  MUNI FEES & TAXATION OF CHARITABLE GAMES                            
  Number 011                                                                   
  REPRESENTATIVE RON LARSON, PRIME SPONSOR OF HB 173,                          
  testified, "Last summer I was talking to one of my friends.                  
  My friend had a problem...and he asked us to look into the                   
  situation...  In some ways we found that there are                           
  conflicting statutes.  One interpretation...is that they                     
  (the city) was allowed to place a sales tax on the                           
  nonprofits.  The other was that the city should not place a                  
  sales tax on it...  What eventually happened then was the                    
  business was moved out of the City of Palmer, because they                   
  were interpreting the legislation one way, to the City of                    
  Wasilla, where they interpreted the legislation another                      
  REPRESENTATIVE LARSON continued, "So this bill is basically                  
  then just trying to set a policy that will be uniform for                    
  all of the municipalities.  ...Should the money raised by                    
  charities be shared with municipalities or should the money                  
  raised by charities be used for those charities in the                       
  purposes that is expressed?...  This bill (HB 173) will                      
  basically exempt from municipal sales taxes those nonprofits                 
  or charities who have the permit and who are also the                        
  operator or the seller."                                                     
  NUMBER 080                                                                   
  REPRESENTATIVE JOHN DAVIES asked if the language (on line                    
  nine of HB 173) "to the extent" could be substituted with                    
  REPRESENTATIVE LARSON understood that language to mean "if                   
  the activity was carried on by the person who has the permit                 
  was also the one who was the operator".                                      
  CHAIRMAN OLBERG asked, "Would it be possible to operate your                 
  own deal and also allow somebody to operate for you?"                        
  Number 106                                                                   
  REPRESENTATIVE LARSON replied, "What we are trying to do is                  
  narrow it down right here where the nonprofit or the                         
  charity, the one who has the permit, is the only one exempt                  
  from the sales tax."                                                         
  CHAIRMAN OLBERG gave an example, "So if the charity was                      
  running a bingo game and at the same time somebody else was                  
  running dart toss for them for a fee, the dart toss would                    
  not be exempt but the bingo game would, is the way I read                    
  this.  To the extent that the permittee who holds the permit                 
  is actually conducting the activity."                                        
  REPRESENTATIVE LARSON concurred and added, "The state does                   
  collect a sales tax on these activities.  Those dollars then                 
  go to the general fund and from the general fund they are                    
  redistributed back to the municipalities.  So municipalities                 
  do get some revenue from these activities."                                  
  Number 133                                                                   
  RICK URION, LOBBYIST, CITY OF BETHEL, testified in                           
  opposition to HB 173 saying, "On one hand the legislature is                 
  restricting revenue sharing and municipal assistance and                     
  then on the other hand, you are cutting back the municipal's                 
  right to tax.  We think this should be a local option and                    
  not be dictated by the state.  The City of Bethel receives                   
  about ten percent of its sales tax from this type of                         
  activity.  Passage of this bill would seriously restrict the                 
  ability of the city to provide the services it provides.                     
  Maybe in your wisdom, if you think this is a good idea, you                  
  could exempt the municipalities who already levy this tax."                  
  Number 154                                                                   
  REPRESENTATIVE JERRY SANDERS asked if the City of Bethel                     
  "gets about ten percent from this" and, "Is all the gaming                   
  in Bethel covered by this?  They lose the whole ten                          
  MR. URION replied, "That is my understanding, that is what                   
  the city (Bethel) tells me, yes."                                            
  REPRESENTATIVE DAVIES asked, "What fraction of their total                   
  budget would that represent?"                                                
  MR. URION said, "I don't know what that is...it's about                      
  $200,000 a year is what it amounts to."                                      
  Number 174                                                                   
  RON PAGENKOPF, JUNEAU YOUTH ACTIVITIES CO-OP, testified in                   
  support of HB 173 saying, "There are basically two problems                  
  that we have with a sales tax on gaming.  One is that it is                  
  recognized throughout almost every place in the United                       
  States except Alaska, that a front end sales tax does not                    
  work with gaming.  It is not possible to collect that tax                    
  from the player at the time of sale.  The second problem we                  
  have is that the boroughs, or the taxing  authorities, want                  
  to tax the same dollar four to five times rather than just                   
  once."  He then gave the committee examples of multiple                      
  taxation of a dollar spent on gaming.                                        
  Representative Williams joined the committee at 1:17 and                     
  Representative Toohey joined the committee at 1:18.                          
  MR. PAGENKOPF continued, "Our proposal is, of course we                      
  support this bill (HB 173) very heavily, but if they do wish                 
  to tax us, tax us the way the state taxes.  That is on the                   
  difference between the price of the ticket and the winnings,                 
  where we pay a three percent tax to the state.  We also pay                  
  a one percent tax to the state on the net revenue that we                    
  receive from gaming...  The thing that scares us is that as                  
  the boroughs raise the sales tax, they will literally put us                 
  out of business and the intent of the law was to raise money                 
  for charity, was my understanding..."  He then rendered                      
  further examples.                                                            
  Number 262                                                                   
  CHAIRMAN OLBERG asked, "Because you are a co-op then you are                 
  subject to this tax?"                                                        
  MR. PAGENKOPF said, "Everybody is subject to the tax                         
  regardless of who you are.  This (HB 173) would allow us not                 
  to pay a sales tax because all we do is share a location."                   
  CHAIRMAN OLBERG clarified, "Your primary objection is not to                 
  this bill, but to the way the tax is imposed at the present                  
  time...  (HB 173) in effect would preclude the borough from                  
  taxing you as they are now."                                                 
  MR. PAGENKOPF concurred.                                                     
  Number 298                                                                   
  REPRESENTATIVE DAVIES MOVED to PASS HB 173 out of committee                  
  with individual recommendations.  There were no objections,                  
  and the MOTION CARRIED.                                                      
  Number 307                                                                   
  CHAIRMAN OLBERG called a short at ease from 1:21 to 1:23                     
  HB 209:  COMMUNITY HEALTH AIDE GRANTS                                        
  Number 312                                                                   
  in support of HB 209 saying, "The Community Health Aide                      
  Training Program is a grant program supported by the state                   
  to assist in a federal effort that supports over 400 health                  
  aides throughout the rural villages of Alaska, providing                     
  health care to the residents of the most remote and rural                    
  communities of Alaska.  All the salaries of those employees                  
  are paid for by federal funds.  The Alaska contribution to                   
  sustaining that part of our health care system has been to                   
  provide some training funds through a grant program that was                 
  established in 1985."                                                        
  MS. MUNSON continued, "In order to control the budget of                     
  that program without anticipating the way things could                       
  change over time, that grant program was established so that                 
  the only eligible grantees were those corporations and                       
  communities which were currently receiving federal funds and                 
  currently employing health aides.  That worked fine until                    
  last year (1992) when in one region...Eastern Aleutian                       
  Tribes formed and began receiving the federal funds to                       
  provide the health aides.  When they came to the state to                    
  apply for the grant for training they were told, 'Sorry, you                 
  are not eligible because you did not exist in 1985'."                        
  MS. MUNSON continued further, "That was fixed for the first                  
  year by an agreement of subcontracts between the two                         
  organizations, but it had the effect of changing the amount                  
  of funding that was available within the organization.  We                   
  worked with the Department of Health and Social Services to                  
  try to come up with a minimal solution to that problem and                   
  that is the bill that was introduced here (HB 209), that                     
  provides a very technical change that says any organization                  
  which is receiving the federal funds to provide Community                    
  Health Aide Service can receive a grant, but we left in                      
  place the limit on the size of that grant based on the                       
  number of health aides that were employed in 1985.  It                       
  simply says, they had to be employed by some regional                        
  organization, not necessarily the same organization, and it                  
  reflects the tendency to form smaller organizations that can                 
  provide better services in a local area."                                    
  MS. MUNSON concluded, "This bill (HB 209) is a very                          
  technical solution to one of those glitches that develops as                 
  time goes by..."  She then addressed the zero fiscal note.                   
  Number 381                                                                   
  REPRESENTATIVE CYNTHIA TOOHEY said, "I support this bill (HB
  209).  When Myra first came to me, there was some feeling                    
  that this would create a large fiscal note...that apparently                 
  has been straightened out.  It does show that there is no                    
  fiscal note with it..."  She then asked, "Does this allow                    
  other communities to tighten up if they had aides in place?"                 
  MS. MUNSON said, "This bill (HB 209) will allow new programs                 
  to come into existence and receive the funding.  The                         
  protection against diminishing the level of funding for any                  
  program too much is that, only programs which can receive                    
  the base funding, if the total were appropriated of $30,000,                 
  (but) no one has ever gotten that full amount, is if they                    
  had three health aides in 1985..."                                           
  Number 416                                                                   
  testified in support of HB 209.  "The department feels that                  
  under self-determination these communities have the right to                 
  choose who is going to be providing the services for them,                   
  if they are going to provide the services for themselves.                    
  Under the current statute it is not equitable in that if a                   
  community, if a village decides to change the organization                   
  that was providing services to them, under the Community                     
  Health Aide Program in 1984, they would no longer be                         
  eligible for state funds..."                                                 
  Number 436                                                                   
  REPRESENTATIVE DAVIES asked why HB 209, introduced by the                    
  HESS Committee, will be referred to the HESS Committee.                      
  MS. MUNSON said, "I was out of town.  The bill (HB 209) went                 
  to the speaker's office for referral and the speaker's staff                 
  recognized that if the bill went into effect and the                         
  legislature was to appropriate at the one hundred percent                    
  appropriation level, which as I have indicated has never                     
  occurred, there could be a possible fiscal impact..."                        
  REPRESENTATIVE TOOHEY concurred, "We were not able to get a                  
  hold of her to reassure the speaker's chamber that it was as                 
  face value.  So that is why the delay and long list of                       
  Number 483                                                                   
  REPRESENTATIVE TOOHEY then MOVED that HB 209 be PASSED out                   
  of committee with individual recommendations.  There were no                 
  objections, and the MOTION CARRIED.                                          
  Number 492                                                                   
  HJR 37:  FED MONEY FOR RURAL WATER/SEWER PROJECTS                            
  HOFFMAN, testified on his behalf saying, "In the summer of                   
  1990, nearly a quarter of the residents of the village of                    
  Kotlik were victims of viral meningitis...I think we all                     
  understand there are some very critical water and sewer                      
  problems in rural Alaska.  In an ongoing effort to identify                  
  sources of funding for rectifying these situations,                          
  Representative Hoffman has come into contact with HJR 1033                   
  in Congress.  This piece of legislation is sponsored by                      
  Congressman Hayes of Louisiana and suggests that the federal                 
  government should provide 300 million dollars a year for six                 
  consecutive years...for constructing water and sewer                         
  projects in economically depressed rural communities."                       
  MR. MCKOWAN continued, "Under the intent currently                           
  established in HJR 1033, the allotments would be made to the                 
  states in the ratio which the population and economically                    
  distressed rural communities of each state bears to the                      
  total population in economically distressed rural                            
  communities of all the states...  In a 1990 report to                        
  Congress, the EPA (Environmental Protection Agency)                          
  estimated that 74 percent of the nation's Native wastewater                  
  problems were located in the state of Alaska."                               
  MR. MCKOWAN continued further, "The governor has asked for                   
  26 million dollars for village safe water through the DEC...                 
  Should HJR 1033 pass...the state of Alaska would qualify for                 
  45 million dollars.  It is a 90 percent federal match, so                    
  rather than go in and have to spend 26 million dollars in                    
  general funds to accomplish (less)...it is my understanding,                 
  that the state, through Village Safe Water dollars, could go                 
  in with five million dollars, purchase 45 million more                       
  dollars, through the federal government, accomplish all the                  
  projects that are listed...on this prioritized list and save                 
  the state 20 million dollars approximately, in general fund                  
  Number 560                                                                   
  REPRESENTATIVE ED WILLIS pointed out that a Glennallen                       
  water/sewer project was on the governor's priority list.  (A                 
  copy of this list may be found in the House Community and                    
  Regional Affairs Committee Room, Capitol Room 126, and after                 
  the adjournment of the second session of the 18th Alaska                     
  State Legislature, in the Legislative Reference Library.)                    
  REPRESENTATIVE TOOHEY asked if the governor's priority list                  
  included population considerations.                                          
  Number 578                                                                   
  indicated that materials providing this information had been                 
  distributed to legislators.  He added, "We are very much in                  
  support of HJR 37...  HJR 1033 is the first comprehensive                    
  attempt to try to provide grants for those smaller                           
  communities which are unable to afford the loan programs...                  
  We think it would be a very good tool to have in the box                     
  with rural communities...  This is just one of the possible                  
  sources of revenue and a very attractive option at this                      
  time, and the timing on this is very good."                                  
  Number 630                                                                   
  CHAIRMAN OLBERG asked about the dollar sign notation on the                  
  governor's priority list.                                                    
  MR. KELTON explained, "The dollar figures that are shown on                  
  there relate to basically two programs.  It is either a                      
  match with the U.S. Public Health Service on projects where                  
  we are going in jointly, or the Environmental Protection                     
  Agency has had a very limited program called the Indian Set                  
  Aside Program where basically half of one percent of the                     
  total federal appropriation for wastewater has been                          
  available for Indian Set Aside Projects.  ...The total                       
  identified need is over 1.2 billion dollars for rural                        
  Alaska, so we have a long ways to go unless we get a steady                  
  sustained source of funding, and we are looking at the                       
  federal government to pick up part of it."                                   
  Number 651                                                                   
  REPRESENTATIVE TOOHEY asked, "Again, is there any limit on                   
  the amount of people in a village that precludes the fact                    
  that they can have a sewer system?  If you have ten people                   
  that set up camp in Iditarod, does that equate to a fact                     
  that they can have a sewer and water system?"                                
  MR. KELTON said, "That is a very good question and one we                    
  have wrestled with for years.  The way we have addressed                     
  that is the priority list that is handed out is developed                    
  through a series of evaluation criteria...obviously, those                   
  that have the bigger problem associated with a larger                        
  population are going to be at the top of the list.  So we                    
  are addressing the bigger needs and if we ever get down to                   
  the point where we are talking about ten people, then                        
  perhaps we will have a real question to answer..."                           
  Number 678                                                                   
  REPRESENTATIVE SANDERS MOVED that HJR 37 be moved out of                     
  committee with individual recommendations.  There were no                    
  objections, and the MOTION CARRIED.                                          
  CHAIRMAN OLBERG adjourned the meeting at 1:53 p.m.                           

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